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DECISION No

DECISION No.96/2000/QD-BTC OF JUNE 12, 2000 PROMULGATING THE DETAILED GUIDANCE ON THE PROCESS AND PROCEDURES FOR ODA CAPITAL WITHDRAWAL

THE MINISTER OF FINANCE

Pursuant to:

The Government�s Decree No.178/CP of October 28, 1994 defining the functions, tasks and organizational apparatus of the Finance Ministry;

The Government�s Decree No.87/CP of August 5, 1997, promulgating the Regulation on the Management and Use of the Official Development Assistance (ODA) source;

The Government�s Decree No.145/1999/ND-CP of September 20, 1999 on reorganization of the General Department for Development Investment under the Finance Ministry;

Joint Circular No.81/1998/TTLT/BTC-NHNN of June 17, 1998 of the Finance Ministry and the Vietnam State Bank, guiding the process, procedures for and management of capital withdrawal with regard to the official development assistance (ODA) capital source,

DECIDES:

Article 1.- To promulgate together with this Decision the detailed guidance on the process and procedures for ODA capital withdrawal.

Article 2.- This Decision takes effect 15 days after its signing and replaces Decision No.1860a/1998/QD-BTC of December 16, 1998 of the Finance Minister.

The general director of the State Treasury, the director of the Investment Department, the head of the External Finance Department, the director of the Administrative and Public-Service Finance Department and the director of the Ministry�s Office shall have to organize the implementation of this Decision.

For the Finance Minister

Vice Minister
LE THI BANG TAM

DETAILED GUIDANCE ON THE PROCESS, PROCEDURE FOR AND MANAGEMENT OF CAPITAL WITHDRAWAL WITH REGARD TO THE OFFICIAL DEVELOPMENT ASSISTANCE (ODA) CAPITAL SOURCE

(promulgated together with Decision No.96/2000/QD-BTC of June 12, 2000 of the Finance Minister)

I. GENERAL PROVISIONS

1. The official development assistance (ODA) capital source for investment in projects, programs (hereinafter referred collectively to as ODA projects) constitute a source of the State budget revenue, which must be accounted into the budget and managed according to the provisions of the State Budget Law and documents guiding the Law.

2. The Finance Ministry shall have to financially manage the capital withdrawal for payment to projects and programs, account the State budget revenues and expenditures regarding ODA capital sources, guide and inspect the implementation of financial management regimes, make final settlement of projects, guide and inspect units in carrying out the hand over of assets, supplies and capital upon the project completion.

3. Agencies that control the expenditures shall be:

+ The State Treasuries at all levels (depending on assignment of responsibility for implementation of each project) to control the spending activities of projects with budget allocation, including projects with a portion of capital sublent to investors.

+ The sub-lending agencies (which are the Development Assistance Fund or agencies authorized by the Finance Ministry in special cases) to control the spending activities of fully sublent projects.

4. The investors shall be answerable before law for the implementation of ODA projects in strict accordance with the commitments prescribed in the international agreements, strictly abide by the State�s regulations on financial management and apply the accountancy accounting and auditing regimes according to the current regulations of the State.

5. This Guidance shall prescribe only the process, procedures for and the management of ODA capital withdrawal. For domestic reciprocal capital, the withdrawal and settlement thereof shall comply with the current regulations on investment and construction management and on the State budget expenditure management, in conformity with the project implementation tempo and the foreign capital withdrawal tempo.

6. For particular projects and programs, depending on the managerial requirements, the Finance Ministry may promulgate specific guidance.

II. ELABORATION OF PLANS FOR ODA PROJECTS

1. Project classification for plan elaboration and expenditure management:

a/ Classification according to spending nature:

- Capital construction investment projects include projects with capital construction spending contents defined in Part II, Section I, Circular No.135/1999/TT-BTC of November 19, 1999 of the Finance Ministry or legal documents amending, supplementing or replacing this Circular.

- Investment projects with administrative and public-service spending contents include projects on investment in the development of economic and/or social fields which have no capital construction spending contents.

For projects which involve both the capital construction spending and the administrative and public-service spending, the investors should consult with the Ministry of Planning and Investment and the Finance Ministry for the application of mode of capital plan elaboration and expenditure management according to either of the two above types of project.

- Credit programs/projects include credit programs/projects or proportion of a project which use ODA capital to sublend to banks and/or credit institutions for further lending to projects or end users in order to achieve the set targets.

b/ Classification according to capital use machanism:

- Allocated projects include projects which use ODA capital according to the mechanism of State budget allocation.

- Sub-lent projects include projects which use ODA capital according to the mechanism of re-borrowing from the State budget.

- Combined projects with allocation-cum-reborrowing include projects which use ODA capital partly allocated by the State budget and partly re-borrowed from the budget.

2. Elaboration of investment capital plans/ or budget estimates of ODA projects:

a/ For allocated projects:

Annually, at the time of elaboration, submission, consideration and approval of the State budget estimates according to the current regulations, the project management boards shall base themselves on the project implementation tempo to elaborate the investment capital plans of the projects (for capital construction investment projects) or the budget estimates (for administrative and public-service projects), and send them to their managing ministries (if the projects are managed by the central government) or the People�s Committees of the provinces or centrally-run cities (if the projects are locally managed) for their inclusion into the general budget plans of the ministries, provinces, which shall be sent to the Finance Ministry and the Ministry of Planning and Investment for submission to the Government and the National Assembly for ratification.

Such a plan must clearly indicate the projects� spending contents and such capital sources as loan capital, aid, domestic reciprocal capital allocated by the central budget or local budgets, contributed capital of beneficiaries, credit capital (if any).

The process of approval and distribution of investment capital plans or budget estimates to projects shall comply with the current domestic regulations (the capital for capital construction projects shall be notified by the Ministry of Planning and Investment, capital for administrative and public-service projects shall be notified by the Finance Ministry). The ministries� or provincial/municipal People�s Committees� decisions on distribution of investment capital plans or budget estimates to projects must be addressed to the Finance Ministry (the Investment Department if they are capital construction projects, or the Administrative and Public Service Department if they are administrative and public-service projects). The Investment Department and the Administrative and Public-Service Department shall have to synthesize them and notify the investment capital plans or budget estimates of projects to the central State Treasury and the External Finance Department for use as basis for monitoring and comparison when allocating and withdrawing ODA capital for project settlement.

b/ For sub-lent projects:

The projects� investment capital plans should be elaborated in strict accordance with the current regulations, clearly stating the ODA capital sources and the reciprocal capital sources. These plans must be approved by competent authorities. The investors shall have to self-procure enough reciprocal capital according to the project implementation tempo and report to the Finance Ministry and the Ministry of Planning and Investment the balance of reciprocal capital.

c/ For combined projects, depending on the nature of the allocated or sub-lent proportion, the process of elaboration of investment capital plans or budget estimates shall apply as provided for in Item a or b above.

3. Plans for ODA capital withdrawal:

Annual plans: In August every year, simultaneously with the process of elaborating the investment capital plans/budget estimates of projects or the ODA credit capital using plans, the project management boards shall elaborate the following year�s plans for ODA capital withdrawal to be sent to their managing ministries and the Finance Ministry (the External Finance Department) for augmentation into a general plan for ODA capital withdrawal, and monitor the withdrawal and use of the ODA capital of the projects in the plan year. Such a plan must clearly define each ODA capital source (if they are projects of aid combined with loan or of co-financing) and shall be split up to every quarter.

III. OPENING ACCOUNTS AND SERVICE BANKS

In order to withdraw capital for settlement, the project management boards shall open appropriate transaction accounts at service commercial banks according to the current regulations. For projects which apply form of payment via Special Account/Advance Account, the project management boards should additionally open the Special Accounts/Advance Accounts bearing the projects� names (for projects financed by the and/or the ADB) or the Finance Ministry�s name (for other projects) at the service commercial banks in order to receive advance capital of donors.

The service banks shall have to notify the situation on foreign capital withdrawal and/or the situation on the payment via the Special Accounts/Advance Accounts of projects to the Finance Ministry, the State Bank and the investors.

In the course of project implementation, the service banks shall enjoy commission according to the current regulations of the State Bank on collection of banking service charges.

IV. CONTROL OF EXPENDITURE ON PAYMENTS WITH ODA CAPITAL SOURCE

l The expenditure control shall apply to the expenditures of all capital construction as well as administrative and public-service projects.

l The dossiers and procedures for expenditure control of the capital construction projects shall comply with the provisions in Circular 135/1999/TT-BTC of November 19, 1999 of the Finance Ministry, guiding the management and settlement of investment capital as well as public-service capital of investment and construction nature, which belong to the State budget capital sources, or legal documents amending, supplementing or replacing this Circular.

l The dossiers and procedures for expenditure control of administrative and public-service projects shall comply with the provisions in Circular No.40/1998/TT-BTC of March 31, 1998 of the Finance Ministry, guiding the regime of management, allocation and settlement of State budget expenditures through the State Treasury, or legal documents amending, supplementing or replacing this Circular.

l The control of dossiers requesting the payment with the foreign capital sources of ODA projects shall not be restricted by the projects� investment capital plans or budget estimates (or the funding limits notices).

l After examining and controlling the spending dossiers and vouchers of units, the expenditure control bodies shall write the certification in the price tickets for settlement of valid value eligible for settlement according to the proportion between foreign capital and reciprocal capital, which has been prescribed in the international agreement or the project documents. The price tickets with certification by the expenditure control bodies shall serve as basis for carrying out the procedures to withdraw foreign capital.

V. FORMS OF CAPITAL WITHDRAWAL

Depending on the provisions of the international agreements, the capital withdrawal and the payment with ODA capital sources shall be effected in one or several of the following common forms: direct payment, special account, letter of commitment, capital reimbursement and money transfer.

Initial dossiers serving as basis for the management of ODA capital withdrawal:

The project management boards should send the following documents to the Finance Ministry (the External Finance Department):

l The investment decision of the competent authority;

l The international agreement on ODA, signed between Vietnam and the donor(s) and project documents relating to the projects;

l The annual investment capital plan/budget estimate allocated by the competent authority;

l The sub-lending agreement signed between the investor and the agency authorized to sub-lend (if they are sub-lent projects);

l The competent authority�s decision to recognize the bid-winning unit (or the decision to appoint bidder);

l The contract (for construction and installation, procurement, consultancy, etc.) signed between the investor and the contractor or the expenditure estimate approved by the competent authority (if the spending activities do not follow the contractual form)

l The competent authority�s decision to approve the contract.

l Where the contract needs the prior-comments of the donor(s), there should be " no objection" from the donor(s).

l The performance guarantee of the contractor�s bank;

l The advance guarantee (if it is the advance payment).

The project management boards shall send the above documents only once for their respective entire projects; particularly the investment capital plan/ budget estimate shall be sent annually.

1. Capital withdrawal process according to direct payment procedures (or form of money transfer):

Direct payment is the form of payment made at the request of the borrower, thereby the donor(s) shall transfer the payment money directly to the contractor/ supplier. This form often applies to cases of payment according to implementation tempo for big construction and installation contracts, consultancy contracts or payment to contracts on import of goods in small volumes which need not to open L/C.

For projects financed by JBIC, this form is called the money transfer capital withdrawal form and only apply to units that withdraw capital in VND.

1.1. To withdraw capital for direct payment by installment, the project management boards shall send the following documents to the Finance Ministry (the External Finance Department):

l The application for capital withdrawal and the copies of lists attached to set forms and the official dispatch requesting the capital withdrawal;

l Payment bill/ request of the contractor;

l The payment price ticket already certified by the expenditure control body. In case of advance payment, there must be the advance payment price ticket certified by the expenditure control body.

l For special cases, the Finance Ministry may request the project management boards to supply documents for additional explanation.

1.2. Within 5 working days after the receipt of complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and sign the application for capital withdrawal and send it to the donor(s).

For projects financed by the WB and/or the ADB, within 5 working days after receipt of complete and valid dossiers, the Finance Ministry (the External Finance Department) shall sent its written comments to the project management boards and the service banks. Within 2 working days after receipt of the written comments of the Finance Ministry, the service bank and the project management board shall together sign the application for capital withdrawal and forward it to the donor(s).

The donor(s) shall consider the capital withdrawal application, and, if accepting it, transfer the money directly into the contractor�s account. For JBIC�s projects, the transfer of payment money into the contractors� bank accounts shall be effected via service banks.

2. The process of capital withdrawal according to procedures of letter of commitment or L/C payment without letter of commitment:

2.1. The commitment letter procedure is the form whereby the donor, at the request of the borrower, shall issue a letter of commitment to pay to the commercial bank the sum of money already paid or to be paid by letter of credit (L/C).

This form often applies to cases of settlement of import goods with L/C and the settlement of the foreign currency portions in contracts of JBIC projects.

The project management boards shall send to the Finance Ministry (the External Finance Department) the following documents:

The official dispatch proposing the Finance Ministry to permit the L/C opening and the request for the issue of the letter of commitment enclosed with the capital withdrawal application and copies of the lists made according to set forms (for JBIC�s projects, the capital withdrawal application and copies of lists are not required).

Within 5 working days after the receipt of complete and valid dossiers, basing itself on the written proposal and the contractual provisions, the Finance Ministry (the External Finance Department) shall consider them and send the written approval to the project management board and the service bank. Basing itself on the written approval of the Finance Ministry, the service bank shall, within 2 working days after the receipt of the Finance Ministry�s approval, carry out the procedures to request the foreign service bank to open L/C and the donor to issue the letter of commitment (in case of JBIC projects), or sign together with the project management board the capital withdrawal application and send it to the donor(s) (in cases of the projects of the World Bank and/or the Asian Development Bank).

The donor(s) shall consider the letter of request or capital withdrawal application, and, if accepting it, issue the letter of commitment.

2.2. L/C payment without requiring the letter of commitment (applicable to a number of bilateral aid projects):

The project management boards shall send to the Finance Ministry (the External Finance Department) the following documents:

- The official dispatch requesting the Finance Ministry to permit the opening of L/C.

Within 5 working days after the receipt of complete and valid dossiers, the Finance Ministry shall send its written approval of the L/C opening to the project management board and the service bank.

3. The process of capital withdrawal according to the procedures for capital reimbursement or retrospective payment:

The capital reimbursement payment is a form under which the donor shall finance the project�s expenditures which have arisen and been already settled with the sources of budget capital or own capital by the borrower. This form often applies to cases of small procurement, or settlement of a number of capital construction components.

The retrospective payment is a form under which the donor shall finance the project�s expenditures which have arisen and been already settled by the borrower with the sources of budget capital or own capital before the borrowing agreement comes into force. This form shall only apply when it is agreed upon by the donor from the time of project preparation and included into the borrowing agreement.

In order to withdraw capital in form of capital reimbursement (or retrospective payment), the project management board shall send the following documents to the Finance Ministry (the External Finance Department):

The documents submitted for each time of capital withdrawal:

l The official dispatch requesting the capital withdrawal and the application for capital withdrawal as well as copies of lists enclosed with set forms. The capital withdrawal application must state the name and account number of the beneficiary unit which has made the advance payment for such capital reimbursement;

l The payment price bill with certification by the expenditure control body according to the current regulations and other vouchers evidencing the amount of money and the source of capital already paid to the contractor;

l For special cases, the Finance Ministry can request the project management board to supply documents for additional explanation.

Within 5 working days after the receipt of complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and sign the capital withdrawal application to be sent to the donor.

For projects financed by the WB and/or the ADB, within 5 working days after the receipt of complete and valid dossiers, the Finance Ministry (the External Finance Department) shall send its written comments to the project management board and the service bank. Within 2 working days after the receipt of the written comments of the Finance Ministry, the service bank shall together with the project management board sign the capital withdrawal application to be sent to the donor.

The donor shall consider it and, if accepting it, transfer the money to reimburse the capital amount already paid.

For the withdrawn amounts to reimburse the amounts already paid by the State budget (or by capital sources originating from the State budget), the withdrawn amounts of money must be paid into the State budget where the capital has been advanced.

For the withdrawn amounts to reimburse the expenses already paid by the project owners with their own capital (or credit capital, or other mobilized capital having not originated from budget), the project owners are entitled to use the withdrawn capital amounts according to the current regulations on financial management.

4. Process of capital withdrawal according to the procedure of Special Account/Advance Account:

4.1. The Special Account/Advance Account is the form under which the donor advances a sum of money to the borrowing party into the Special Account/Advance Account in order to facilitate the latter in small payments, reduce the number of times applying for capital withdrawal from the donor and speed up the payment for the project�s activities. This form often applies to cases of payment of construction and installation bills according to tempo, the procurement of small equipment, the expenses for activities of the project management board, etc.

The limit of the Special Account/Advance Account depends on the project�s spending needs, determined in the capital borrowing agreement or letter of capital disbursement of the project.

a/ The first withdrawal of capital into the Special Account/Advance Account:

To make the first withdrawal of capital into the Special Account/Advance Account, basing itself on the account limit prescribed in the capital-borrowing agreement and the estimated expenditure in the coming period, the project management board shall forward the following documents to the Finance Ministry (the External Finance Department):

The official request for capital withdrawal, the application for capital withdrawal and copies of the lists enclosed with set forms.

Within 5 working days after the receipt of complete and valid dossiers, basing itself on the signed international agreement, the Finance Ministry (the External Finance Department) shall consider and sign the capital withdrawal application before sending it to the donor.

For WB- and ADB-financed projects, within 5 working days after receiving complete and valid dossiers, the Finance Ministry (the External Finance Department) shall send its written comments to the project management board and the service bank. Within 2 working days after the receipt of the written comments of the Finance Ministry, the service bank shall together with the project management board sign the capital withdrawal application and send it to the donor.

The donor shall consider and accept the request before transferring money into the Special Account/ Advance Account.

b/ The process of making expenditures from the Special Account/Advance Account:

- The process of afterward inspection by the expenditure control body:

Upon a spending request to make payment for the contractor/supplier/consultant, after making the pre-acceptance test, examination of work volume and vouchers, agreeing to make payment in strict accordance with the current regulations and calculating the sum to be paid with ODA capital according to the rate prescribed in the project document, the project management board shall request the service bank to deduct money from the Special Account/Advance Account for payment to the beneficiary.

Within 5 working days after the withdrawal of capital from the Special Account/Advance Account to make payments, the project management board shall forward the prescribed payment dossiers and vouchers to the expenditure control body so that the latter effects the control of expenditures according to the current regulations. Within 5 working days, basing itself on the dossier and voucher inspection results, the expenditure control body makes certification of the completed volume eligible for the payment on the price bill or the list (together with the payment of the reciprocal capital portion, if any).

In case of making lump-sum or final payments to contracts, the project management board shall send the dossiers and vouchers according to current regulations to the expenditure control body proposing the prior inspection and certification of the dossiers� eligibility for payment. Within 5 working days, the expenditure control body shall examine the dossiers and vouchers, certify the completed volume eligible for payment (together with the payment of the reciprocal capital portion, if any). Basing itself on the certification by the expenditure control body, the project management board shall carry out procedures with the service bank to make payments from the Special Account/Advance Account to the contractor.

The price bill certified by the expenditure control body constitutes one of the bases for the project management board to carry out the procedures for withdrawal of capital for subsequent addition to the Special Account/ Advance Account.

- The process of prior inspection by the expenditure control body:

For projects managed by different levels (central and local) or characterized by their complexity, the form of prior inspection by the expenditure control body shall apply to the expenditures from the Special Account/ Advance Account as follows:

According to this process, the service bank shall disburse the capital from the Special Account/Advance Account only when the payment requests are enclosed with the price bills with certification of eligibility for payment by the expenditure control body.

l Upon a request to make payment to the contractor/supplier/consultant, etc. , the project management board (central/local) shall send the payment dossiers and vouchers according to the current regulations to the expenditure control body. Within 5 working days, the expenditure control body shall inspect the dossiers, certify the foreign capital portion�s eligibility for payment (and settle the reciprocal capital portion, if any).

For projects managed by different levels:

l In order to withdraw capital from the Special Account/Advance Account, the local project management board shall forward the payment request with certification by the expenditure control body to the central project management board.

l Basing itself on the request of the local project management board, the central project management board shall send the payment request enclosed with the certification by the expenditure control body to the service bank for disbursement of capital from the Special Account/Advance Account to make payments to the beneficiary.

l Where projects have advance accounts at the local level (grade 2- Advance Account), the local project management board shall forward the payment request enclosed with certification by the expenditure control body to the service bank for disbursement of capital from the grade-2 Advance Account to make payment to the beneficiary.

For projects managed by one level:

l The project management board shall send the payment request enclosed with certification by the expenditure control body to the service bank for disbursement of capital from the Special Account/ Advance Account to make payment to the beneficiary.

c/ The process of withdrawal of capital for addition to the Special Account/Advance Account

In order to withdraw capital for addition to the Special Account/Advance Account, the project management board should send the following documents to the Finance Ministry (the External Finance Department):

l The official request for withdrawal of capital for addition to the Special Account/Advance Account, the capital withdrawal application and copies of lists enclosed with set forms;

l The copy of the list of expenditures elaborated by the project management board, which clearly indicates the amounts spent from the Special Account/Advance Account, the serial number/date of the written certification by the expenditure control body of the spent amounts, together with the copy of the payment price bill certified by the expenditure control body.

l The copy of the list of special accounts of the service bank;

l The debt acknowledgement contract signed between the investor and the body authorized by the Finance Ministry to manage the re-borrowed amounts with regard to the amounts of money already withdrawn from the special account (in case of sub-lent projects).

Within 5 working days after the receipt of complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and sign the capital withdrawal application and send it to the donor.

For projects financed by the WB and/or the ADB, within 5 working days, the Finance Ministry (the External Finance Department) shall send its comments to the project management board and the service bank. Within 2 working days after the receipt of written comments of the Finance Ministry, the service bank shall together with the project management board send them to the donor.

The donor shall consider and, if accepting the request, transfer the money for addition to the Special Account/Advance Account.

4.2. Capital withdrawal and payment by mode of Special Account for JBIC�s loan capital:

a/ Opening the Special Account and the first-time capital withdrawal:

- Under the authorization of the Finance Ministry (the External Finance Department), the Vietnam Foreign Trade Bank shall open the Special Account in Yen and the Account of Interests on the Special Account at the Tokyo-Mitsubishi Bank with the Finance Ministry (the External Finance Department) as the account holder.

- At home, the Finance Ministry (the External Finance Department) shall request the Vietnam Foreign Trade Bank to open the special-use accounts reciprocal to the Special Account and the Account of Interests of the Special Account, with the Finance Ministry (the External Finance Department) as the account holder in order to monitor and account the already withdrawn money amounts and the amounts of interests on the Special Account as well as the subsequent debt payment.

- The Finance Ministry (the External Finance Department) shall sign the application for the first-time capital withdrawal and send it to the donor with the value prescribed in the agreement, which, however, must not exceed 50% of the value of the agreement. The first-time capital withdrawal requires no enclosed vouchers.

b/ Payments made from the Special Account:

- For expenditures made in VND:

l The investor/project management board shall collect vouchers and send them to the expenditure control body for inspection of the expenditures according to the current regulations.

l After getting the certification from the expenditure control body, the investor/project management board shall compile dossiers to be sent to the Finance Ministry (the External Finance Department), including: The written request for payment to the contractor with certification by the investor, the accumulated payment claimed and paid, invoice, payment price bill with certification by the expenditure control body. In case of advance payment, the advance guarantee of the bank accepted by the investor is also required.

l Within 7 days after the receipt of complete and valid dossiers, the Finance Ministry or the agency authorized by the Finance Ministry shall send an official dispatch, requesting the Vietnam Foreign Trade Bank to transfer the payment money at the request of the investor. Within 3 days after the receipt of the written request, the Vietnam Foreign Trade Bank shall transfer the money, then send the money transfer notice enclosed with the money transfer vouchers of the bank to the Finance Ministry so that the latter shall carry out the procedures to withdraw capital for addition to the Special Account.

- For the expenses in foreign currency(ies) to pay for the import L/Cs:

l The Finance Ministry shall authorize the Vietnam Foreign Trade Bank to automatically deduct the Special Account for payment of import L/Cs in strict accordance with the regulations on mode of payment by L/C.

l After the payment, the Vietnam Foreign Trade Bank shall duplicate the import vouchers enclosed with the certification of payment and send them to the Finance Ministry (the External Finance Department) for carrying out the procedures to withdraw capital for addition to the Special Account.

c/ Withdrawal of capital for addition to the Special Account:

The Finance Ministry shall gather the payment vouchers of the Vietnam Foreign Trade Bank, enclosed with the written request for payment of expenses in VND, or the import vouchers enclosed with the written certification of payment by the Vietnam Foreign Trade Bank and send the capital withdrawal application to the JBIC.

If the value of the first withdrawn capital amount is equal to 50% of the agreement value, the subsequent additional capital withdrawals may represent only 50% of the requested value. If the value of the first-time withdrawn capital amount is smaller than 50% of the agreement value, the Finance Ministry (the External Finance Department) may withdraw 100% of the requested value until the total withdrawn capital value represents 50% of the agreement value. Then, the subsequent additional capital withdrawals shall be entitled to the addition equal to 50% of the value of the capital withdrawal request in order to ensure that when 100% of the agreement value are disbursed, the donor(s) can fully recover the vouchers on capital withdrawal.

5. Process of capital withdrawal for credit projects or credit constituents:

Credit projects or credit constituents of projects shall be effected as follows: Depending on the demands for further loans and expenditures on the project contents, the credit institutions undertaking the re-borrowing shall prepare the dossiers on capital withdrawal from the donor to effect the further loans or expenditures for the project�s activities in strict accordance with the provisions of the loan agreement, the project agreement (if any) and the current regulations on credit, bidding, procurement, etc.

The credit institutions undertaking the re-borrowing should forward the following vouchers to the Finance Ministry:

- The official dispatch requesting the capital withdrawal;

- The capital withdrawal application enclosed with the copies of the list of sub-lent amounts according to the regulations of the donor (the credit institution undertaking the re-borrowing shall be answerable for the legality, truthfulness and accuracy of the sub-lent amounts);

- Vouchers evidencing the legality, validity of the expenses for the project�s activities.

Within 5 working days after the receipt of complete and valid dossiers, the Finance Ministry (the External Finance Department) shall consider and sign the capital withdrawal application to be sent to the donor.

For projects financed by the WB and/or the ADB, the Finance Ministry (the External Finance Department) shall, within 5 working days, send its written comments to the re-borrowing credit institution and the service bank. Within 2 working days after getting the written comments of the Finance Ministry, the service bank shall, together with the re-borrowing credit institution, sign the capital withdrawal application to be send to the donor.

VI. REGIMES OF REPORTING ON, FINAL SETTLEMENT, INSPECTION AND AUDITING OF THE CAPITAL WITHDRAWAL AND USE BY ODA PROJECTS

1. Monthly, the service banks shall have to send their report on the duplication and listing of the Special Accounts/ Advance Accounts to the Finance Ministry (the External Finance Department and the project management board).

2. Monthly, the project management boards shall have to make the copies and listing of amounts already disbursed by the donor(s) according to each form of capital withdrawal, then send them to the Finance Ministry (the External Finance Department) and the expenditure control body.

3. The investors of ODA projects and programs shall have to make quarterly/annual reports on the implementation of the investment capital or the final settlement of capital for administrative and public-service expenses and the report on the settlement of the completed projects. The accounting reports and the final settlement reports shall have to comply with the current regulations of the Finance Ministry.

4. Depending on the request of the donor(s), annually, ODA projects and programs must be audited by an independent auditing company accepted for the auditing by the Finance Ministry. The auditing plan, the decision on selection of the auditing company and the auditing contract must conform to the regulations of the donor(s) and approved by the Finance Ministry. The auditing report must be sent to the Finance Ministry within 15 days after completion. (For projects financed by the World Bank and/or the Asian Development Bank, the auditing reports shall be concurrently sent to the State Bank (the International Cooperation Department).

5. The Finance Ministry shall conduct the regular or irregular financial examination and inspection of organizations and units, that use ODA capital, particularly the inspection of the use of the special accounts.

For the Finance Minister

Vice Minister
LE THI BANG TAM